Increase in fiscal values to cause 70% of vehicles to pay more Marchamo

November 15th, 2012 (InsideCostaRica.com) With next year’s “marchamo” (annual motor vehicle tax) payment coming up, many vehicle owners will see an increase in the fiscal value of their vehicles, which in turn causes an increase in the amount due for marchamo.

According to Marieta Montero, an official at “Tributacion” (tax department), the increase in fiscal value applies to nearly 70% of the vehicles in the country – close to 1.2 million vehicles, including motorcycles, cars, and trucks.

The increase in the fiscal value of vehicles is a consequence of an update made by authorities to the market value and depreciation they use to determine the fiscal value of vehicles.

“Tributacion has been conducting market research, because the law indicates that the tax has to be paid according to the market value,” said Montero.

According to Montero, the research, which was carried out from February until August, 2012, demonstrated to the tax department that the values used as reference were outdated, because the depreciation formula that was being used had been unchanged in 20 years.

“Most vehicles had very low values. For example, a ’99 Rav4 was valued at 600,000 colons (previously),” said Montero.

The correction has been applied to all vehicles for the current fiscal period.

The old formula allowed for more depreciation on older vehicles. As a result, the new formula will affect some vehicle owners more than others.

“Those who are most affected are owners of vehicles that are a little older, because those were the ones who had more depreciation (figured into their fiscal value),” said Montero.

However, the increase in tax is not in equal to the increase in fiscal value. While a vehicle’s fiscal value my increase by 42%, for example, the tax increase would be close to 18% for a 1990 model year vehicle.

Thus, newer model year vehicles, whose market value is closer to the original value, will suffer less increase in tax.

A Facebook user, posting on the Facebook page of the local daily newspaper La Nacion, explained his experience paying his Marchamo this month. “My car is a 2007 Honda Civic. Last year it had a fiscal value of 7.1 million colones and my marchamo was 164,000 colones. This year, they said it had a fiscal value of 8.9 million colones, and I had to pay 224,000 colones,” Walter Alpizar said.